DOJ settles Alibaba case for $600M, critics call it too lenient
7 reported
According to a CBS News report, the Justice Department resolved an eight-year investigation into Chinese online retailer Alibaba and its U.S. payment processing company, AUS Merchant Services Inc., with a $600 million non-prosecution agreement. Prosecutors had believed they had enough evidence to prove felony violations of the Food, Drug and Cosmetic Act, but the company only admitted to lesser misdemeanor violations. The case, which began during President Trump’s first administration and continued through the Biden administration, involved investigators from multiple agencies. Career prosecutors had urged a deferred prosecution agreement with felony admissions, but senior leadership opted for the lighter resolution. A person familiar with the evidence called the outcome “beyond disappointing,” saying the conduct was “egregious” and the agreement “not even a slap on the wrist.” The Justice Department defended the settlement, stating it does not believe in “regulation by prosecution” and that both civil and criminal options are considered. The report also describes similar softening of other Food, Drug and Cosmetic Act cases, including investigations into Philips CPAP machines and Abbott Laboratories baby formula contamination.
What’s reported
Alibaba and AUS Merchant Services Inc. were investigated for eight years for selling dangerous drugs, chemicals, and pill presses to U.S. customers.
Prosecutors believed they had evidence of felony violations of the Food, Drug and Cosmetic Act.
The case was resolved with a $600 million non-prosecution agreement, with the company admitting only to misdemeanor violations.
Career prosecutors had recommended a deferred prosecution agreement with felony admissions.
A source called the resolution “beyond disappointing” and “not even a slap on the wrist.”
The Justice Department said it does not believe in “regulation by prosecution” and that both civil and criminal options are available.
The report also notes similar softening of cases involving Philips CPAP machines and Abbott Laboratories baby formula contamination.
Key figures
Lisa Gilbert, co-president of Public Citizen (consumer advocacy group)
Tysen Duva, assistant attorney general of the Criminal Division
Senator Adam Schiff (Democrat, California)
Acting Attorney General Todd Blanche
Sources: CBS News
